System &amp; method for unique digital asset identification and transaction management

ABSTRACT

The present invention provides a method for tracking of digital assets within a system through the use of digital serial numbers. Systems equipped with the present invention can uniquely identify copies of assets within it. Assets that originate within the system can be uniquely identified even outside the system. Their transaction history within the system can be traced by looking up the transaction history associated with an assets&#39; serial number. The serial number applied to an asset is unique to each transaction and applied at the time a copy is made. Database entries are created that link each unique serial number to aspects of the transaction. Each serial number references details about a particular transaction such as parties involved, date and time of copy, ownership, terms of use, and payment terms. Using the present invention any copy of an asset within the system can be copied to another part of the system as if it were the original and with the accompanying terms and conditions in effect for that original at the time of transfer. The serial number does not noticeably interfere with the intended usage of the asset. Serial numbers can be applied to any asset media type or format.

FIELD OF THE INVENTION

[0001] The present invention relates to the tracking of digital assetsover a network, and more particularly to marking of a digital asset tolink a unique asset serial number to transaction, license, and rightsmanagement information.

BACKGROUND OF THE INVENTION

[0002] Historically distribution of intellectual property works has beencontrolled through the production of quality reproductions on a mediumthat can be sold to interested parties. With the advent of the Internetand its subsequent distribution capability and broad acceptance,intellectual property assets that can be digitized can now be reproducedand distributed without quality degradation or compensation to therights holders. New systems for controlling the distribution, royaltypayment, and terms of use for these assets are being created to bettertake advantage of and mitigate the disadvantages of this new medium.

[0003] As a first step many rights holders have begun to add digitalwatermarks to their assets. Assets are then distributed in a variety ofways to customers who have paid for them. When an asset is encounteredin questionable circumstances, the watermark is identified and the useris asked to produce proof of purchase for that asset or faceconsequences. These watermarks are applied at the time the digital assetis created and used for identification and enforcement purposes.Unfortunately, the use of watermarks alone is not sufficient to ensurethat transfers of digital assets are properly accounted for.

[0004] Another approach has been to encrypt assets before distribution.Before the asset can be used, the purchaser must acquire a key to unlockthe asset. This places a great demand on customers and runs the risk ofincreasing frustration levels. This also requires secure key managementthus shifting the problems to another asset that must be managed.Encrypted assets have been popular among rights holders but to date havenot been widely accepted by customers.

[0005] Some rights holders are establishing new media formats thatcontain mechanisms to control usage. Such distribution methods cancontrol numbers of playbacks and still be portable for use on properlyequipped machines. For the consumer this means adopting new (andpotentially incompatible) media formats, technology, and hardware. Thisapproach requires a high degree of industry adoption and customer basepenetration to be successful.

[0006] As a method of preventing copies from being pirated, some systemsare trying to establish a market for streaming assets. This allows for acontrolled one time delivery and use of the asset by the customer. Atpresent customers have not fully adopted this medium for a variety ofreasons. In particular, it lacks the convenience of portability andplayback and as yet paying for subscriptions has not proved a popularmodel.

[0007] Accordingly, there is clear and compelling need for an improvedsystem for introducing, distributing and tracking digital assets in amanner that balances the needs of rights holders and end users. Inaddition, it would be extremely desirable to allow peer-to-peer transfer(or controlled centralized distribution) of assets in formats that arealready widely adopted and popular while identifying payment and usagerestrictions at the time of transfer.

SUMMARY OF THE INVENTION

[0008] A primary object of the present invention, therefore, is toprovide an improved system and method that overcomes the aforementioneddisadvantages of the prior art;

[0009] A further object of the present invention is to provide a systemand method for permitting rights holders to introduce digital assetsinto a controlled distribution/tracking network under suitable terms ofuse and other customized, flexible distribution conditions;

[0010] A further object of the present invention is to provide end-usersand other consumers of digital content with an easy, flexible andrelatively transparent environment for locating, securing and enjoyingdigital assets of interest;

[0011] A related object of the present invention is to ensure that suchdigital assets are substantially backwards compatible with the largeexisting infrastructure of installed hardware devices/software that playan assortment of digital content, such as MP3 players, MPEG 2 players,etc., so that users do not have to make additional investments inproprietary hardware and software;

[0012] Another object of the present invention is to provide a digitalasset management system and method that tracks transfers of digitalassets within a network, so that terms of use compliance issues,accounting issues, etc., are transparently and accurately recorded;

[0013] A related object is to provide a tracking mechanism and methodthat relies primarily on creating separate instantiations of a digitalasset to facilitate tracking of the latter;

[0014] Still a further related object is to provide a tracking andaccounting system and method that is reasonably robust and trustworthyso as to overcome rights holders doubts and uncertainties concerning theuse and distribution of their products;

[0015] Another related object is to reduce the need for cumbersomeencryption/licensing procedures which inhibit user interaction and thusthe potential market for distribution and enjoyment of digital assets;

[0016] Yet another object of the present invention is to ensure that atracking system and method is sufficiently flexible to accommodate avariety of different digital content media, and a variety of differentcomputing platforms used by end users;

[0017] A related object of the present invention is to provide userswith a peer to peer environment for exchanging digital assets, to ensurethat a distribution system is compatible with existing practice, tastesand preferences;

[0018] It will be understood from the Detailed Description that a numberof different unique inventions are presented by the present disclosure,each of which can be implemented in a multitude of differentembodiments. Furthermore, it will be readily appreciated by skilledartisans that such different embodiments will likely include only one ormore of the aforementioned objects of the present inventions. Thus, theabsence of one or more of such characteristics in any particularembodiment should not be construed as limiting the scope of the presentinventions.

[0019] In accordance with one aspect of the present invention, a digitalasset is marked with a unique serial number using steganographictechniques at the time the asset is introduced into a system. Thedigital asset is also marked with a new unique serial number each timeit is transacted within the system.

[0020] In accordance with another aspect of the present invention theserial number is recorded in databases where it is linked to specificsabout the time and parties involved in the transaction as well asadditional information such as details of ownership, royalties, andterms of use associated with the digital asset.

[0021] Another aspect of the present inventions concerns a system fordistributing digital assets in a peer-to-peer connectable environmentacross a network, including between a first peer network device and asecond peer network device connected to the Internet. The systemincludes a first rights-holder server coupled to the network and adaptedto introduce a digital asset into the peer-to-peer connectableenvironment. The digital asset audio, video, picture and/or text baseddata associated with a first set of distribution rules, which in apreferred embodiment, are not static, and can change from transfer totransfer. A second host server is coupled to the network, and suchserver stores and distributes the digital asset to end users. A thirdmanagement server is also coupled to the network, and it is adapted totrack transfers of the particular digital asset over the network and togenerate tracking records associated with such transfers. With thisarchitecture, transfers over the network involving the digital asset,including between the first peer network device, the second peer networkdevice and/or the second host server are all processed in accordancewith the desired first set of distribution rules set out by the rightsholder.

[0022] This architecture ensures security, compliance, andaccountability for each instantiation of the asset. Furthermore, itenhances user ease of use since the customer peer network device canobtain the digital asset from the second peer network device and/or thesecond host server, and without requiring further authorization from thefirst rights-holder server. Thus, transfers of the digital asset arealso performed in a peer to peer fashion over the network.

[0023] In a preferred embodiment the digital asset is modified for eachtransfer, and this modification is used by the third management serverfor generating the tracking records. Again, the modification does notalter user-perceptible content of the digital asset. Further in apreferred embodiment, the modification constitutes an original oraltered identification label (serial number) for the digital asset sothat each transfer of the digital asset is associated with a uniqueidentification label. Furthermore, to assist the tracking of the digitalasset, a separate and new instantiation of the digital asset is createdfor each transfer occurring over the network between peer devices.

[0024] The first set of distribution rules include indexing information,terms of use, and a location of the second host server to facilitatetransfers. The digital asset can also be encrypted to reduceunauthorized transfers over the network in a manner similar to that usedin prior art systems.

[0025] Another aspect of the present inventions is directed to a rightsholder system for introducing digital assets into an electronic networkdistribution system. The system includes a first computer coupled to theelectronic network distribution system, which again, includes theInternet. A client/server software module includes software routines toperform at least the following operations: (1) receiving and storing adigital asset on the first computer; (2) processing administrationinformation for the digital asset, including an asset identifier and arights-holder identifier, and associating the same with the digitalasset; and (3) interacting with a digital asset management system togenerate a modified version of the digital asset. The modified versionof the digital asset is based on the administration information andtracking history information provided by the digital asset managementsystem. Thereafter the modified version of the digital asset is postedto any one or more locations suitable for download by the peer devicesfrom the electronic network distribution system. Accordingly, themodified version of the digital asset is configured so that a trackinghistory can be maintained by the digital asset management system of eachtransfer of separate instantiations of the digital asset between peerdevices coupled to the electronic network distribution. This formattingof the digital asset, therefore, allows it to be securely but easilytransacted at later time, and with a varying set of distribution rules.

[0026] The administration information includes, among other things,terms of use and expiration data for the digital asset. Furthermore, theadministration information can include a set of distribution rules thatcan be changed so that later instantiations/transactions of the digitalasset within the electronic network distribution system can becontrolled on a transaction by transaction basis.

[0027] The rights holder system is further configured to receiveaccounting information from the digital asset management system,including: (a) information concerning the number of instantiations ofthe digital asset created by transfers within the electronic networkdistribution system; (b) revenue derived from and/or to be credited forthe transfers.

[0028] A further aspect of the present invention is directed to animproved system for exchanging digital assets over a network in a peerto peer fashion including a first computer coupled to the network, thefirst computer storing a digital asset which includes both digitalcontent and a first unique identifier associated with a firstinstantiation of the digital asset; and a second computer coupled to thenetwork. A first software routine executing on the first computer and/orthe second computer is adapted to coordinate transfer of the digitalasset to the second computer. By creating a second instantiation of thedigital asset for the transfer to the second computer, including asecond unique identifier, peer-to-peer transfers can be accommodated andyet still accounted for properly.

[0029] If either of the two client devices thereafter elects to host thedigital asset, a second transfer of the digital asset can occur fromeither the first computer and/or the second computer, the secondtransfer further using a third instantiation of the digital asset and athird unique identifier. In a preferred embodiment, the client computerdevices can include a portable electronics device, a personal computer,a personal digital assistant, and/or a telephone, and the digitalcontent of the digital asset includes an MP3 based audio file.

[0030] In another variation, the second unique identifier is based oncombining information from any one or more of the following: a first idfor the first computer, a second id for the second computer, an asset idfor the digital asset, a customer id, a randomly generated number and/ora time of the transfer.

[0031] To increase the utility of the system, a catalog of availabledigital assets is maintained at the first computer; this catalog may bebased on a centralized database of items, or may reflect only itemsavailable in nearby download locations. Thus, the second computer canpoll other computers coupled to the network to determine an optimaltransfer source for the digital asset.

[0032] Preferably, before any assets are transferred, an authorizationroutine—adapted to secure agreement from a user of the second computerto access terms associated with the digital asset—is first executed.

[0033] Also in a preferred embodiment, a setup routine is executed forthe end user. This routine is adapted to set up a transaction accountwith a digital asset management system separate from the first computerand the second computer. The user's transaction account includes anidentifier for a user of the second computer, identifiers for anytransfers performed by the user, and billing information associated withthe transfers.

[0034] In a further variation, the first computer can also elect toperform hosting functions, and thus receive credits from the digitalasset management system for all authorized transfers made of digitalassets.

[0035] Another aspect of the present invention is directed to a systemfor managing transfers of digital assets over a network. This aspectincludes a management computer coupled to the network (Internet) andsupported by a variety of software modules and file structures includingtracking databases. A first software routine executing on the managementcomputer prepares a digital asset for transfer over the network inaccordance with a set of distribution rules (preferably provided by arights holder). A modified version of the digital asset is generated bythe first software routine including a unique identification numberassociated with a first instantiation of the modified version of thedigital asset. A second software routine executing on the managementcomputer tracks transfers of the digital asset over the network, bycorrelating a separate instantiation of the digital asset created foreach transfer occurring over the network.

[0036] In this fashion, transfers of the digital asset can take place ina peer-to-peer manner over the network in coordination with themanagement computer and such that a complete tracking history for thedigital asset is maintained by the system. To assist in locating andtransferring digital assets, electronic indexes and catalogs areprovided by the management computer.

[0037] Preferably, the set of distribution rules are provided by arights-holder management system, and include restrictions on terms ofuse and time periods of use. The set of distribution rules includeinformation on title, author, and identification numbers for the digitalasset.

[0038] In a preferred embodiment, the unique identification number is aserial number embedded into the first instantiation of the modifiedversion of the digital asset using a steganographic process. Tofacilitate tracking of later transfers, a subsequent uniqueidentification number used for a second instantiation of the digitalasset. In some applications the subsequent ID can be derived in partfrom the unique identification number.

[0039] Further in a preferred approach, the first software routine usesan index to further identify network accessible locations available fortransfers of the digital asset.

[0040] In another variation, an accounting routine is used by thedigital rights management system for performing accounting functions inconnection with the transfers, including crediting of rights holdersaccounts, crediting of transaction host accounts, and/or debiting ofuser accounts.

[0041] In still another variation, a monitoring routine performsauthentication operations on digital assets stored and/or transferredbetween client systems over the network. The authentication operationsinclude a determination of an embedded serial number of a digital assetand an identification of a last authorized transfer of the digitalasset. Depending on the findings of such monitoring routine, adjustmentscan be made to a user account, including access privileges, to ensurecompliance with the terms of use and other distribution rules.

[0042] Further in a preferred embodiment of this aspect of theinvention, a tracking database keeps a tracking history for the digitalassets, including all transfers over the network. This history can bederived from the unique identification (serial) number embeddedsteganographically within certain portions of the digital asset. Tofacilitate locating the embedded serial number, an offset can becomputed and stored in a header or other portion of the digital contentfile.

[0043] In a preferred implementation, therefore, distributions of thedigital asset over the network are not preconditioned on securingauthorization for individual copies of the digital asset.

[0044] Other aspects of the present invention are directed to novel andimproved methods of introducing, transferring, tracking and managingdigital assets across a network, including in a peer to peer connectableenvironment.

[0045] These include a method of distributing digital assets in apeer-to-peer connectable environment across a network, including betweena first peer network device and a second peer network device, whichincludes the following steps: (a) introducing a digital asset into thepeer-to-peer connectable environment, the digital asset having anassociated first set of distribution rules; and (b) storing anddistributing the digital asset at a first network accessible location sothat a transfer of the digital asset can be made by the first peernetwork device and/or the second peer network device; and (c) generatinga tracking record associated with the transfer; and (d) repeating atleast step (c) for any subsequent transfers of the digital asset withinthe network.

[0046] In accordance with this improved transfer methodology the initialtransfer, as well as any of the subsequent transfers over the networkinvolving the digital asset between the first peer network device, thesecond peer network device and/or the first network accessible locationare processed in accordance with the first set of distribution rules andare associated with tracking records.

[0047] In addition another aspect of the invention concerning a methodof introducing digital assets into an electronic network distributionsystem includes the following steps: (a) receiving and storing a digitalasset on a first computer coupled to the electronic network distributionsystem; and (b) processing administration information for the digitalasset, including an asset identifier and a rights-holder identifier; (c)associating the administration information with the digital asset; and(d) interacting with a digital asset management system to generate amodified version of the digital asset, the modified version of thedigital asset being based on the administration information and trackinghistory information provided by the digital asset management system; (e)posting the modified version of the digital asset to a location suitablefor download by client devices from the electronic network distributionsystem.

[0048] In this fashion, the digital asset is configured in a manner suchthat a tracking history can be maintained by the digital assetmanagement system of each transfer of separate instantiations of thedigital asset between peer devices coupled to the electronic networkdistribution.

[0049] Another aspect of the present invention concerns a method ofexchanging digital assets over a network and includes the steps of: (a)storing a digital asset on a first computer coupled to the network,which digital asset includes both digital content and a first uniqueidentifier associated with a first instantiation of the digital asset;and (b) coupling the first computer to a second computer over thenetwork; and (c) creating a second instantiation of the digital asset,including a second unique identifier; (d) storing the secondinstantation of the digital asset at the second computer.

[0050] Still a further aspect of the present invention is directed to amethod of managing transfers of digital assets over a network, andincludes the steps of: (a) coupling a digital asset management computerto the network; and (b) providing a digital asset to the digital assetmanagement computer; and (c) providing a set of distribution rules forthe digital asset; and (d) preparing a modified version of the digitalasset for transfer over the network in accordance with the set ofdistribution rules, the modified version including a uniqueidentification number associated with a first instantiation of themodified version of the digital asset; and (e) tracking transfers of thedigital asset over the network. With this inventive process, a separateinstantiation of the digital asset is created for each transferoccurring over the network, thus facilitating accurate tracking,accounting and security for such asset.

[0051] Yet another object of the present invention is directed a moredetailed method of providing a digital asset for distribution includingthe steps of: (a) preparing a digital asset for distribution over anelectronic network, the digital asset including digital content that isassociated with a digital rights holder; (b) providing a serial numberfor the digital asset, the serial number being uniquely identified witha first introduction of digital asset for distribution within theelectronic network; and (c) embedding the serial number within thedigital asset so as to generate a first instantiation of the digitalasset suitable for distribution over the electronic network; and (d)placing the first instantiation of the digital asset in one or morelocations accessible by users of the electronic network; and (e)providing a list of the one or more locations so that the users of theelectronic network can locate the first instantiation of the digitalasset; (f) updating a transaction database associated with the digitalasset to reflect an occurrence of the first instantiation of the digitalasset; (g) updating a digital asset index database with administrativeinformation associated with the digital asset, including a list of theone or more locations, terms of use of the digital asset and categoryinformation for the digital asset. Using this inventive method, users ofthe electronic network can monitor the digital asset index databasebefore electing to access the first instantiation and/or laterinstantiations of the digital asset.

[0052] Another object of the present invention includes a method ofdistributing a digital asset within an electronic network that includesthe steps of: (a) providing an index of digital assets available fordistribution over the electronic network, each digital asset having afirst serial number associated with a first transfer within the network,and including digital content that is associated with a digital rightsholder. The index thus includes a list of one or more locations for thedigital assets, terms of use of the digital assets and categoryinformation for the digital assets. Additional steps performed alsoinclude: (b) providing a second serial number for the digital asset inresponse to a request for a second transfer of a digital asset, thesecond serial number being embedded within the digital asset; and (c)transferring the digital asset from a host server to a client device inresponse to a confirmation of acceptance of the terms of use for thedigital asset; and (d) updating a transaction database associated withthe digital asset to reflect the second transfer of the digital asset.

[0053] Accordingly several objects and advantages of the inventioninclude:

[0054] Peer-to-peer structure preserved. Assets may be transferred in apeer-to-peer environment. This allows greater transfer performance bydecentralizing distribution and allowing any copy of an asset to becomea source for additional copies. This advantage leads to loweroperational overhead, greater transfer speed, and more robust transfers.Peer-to-peer transaction structures are proving very popular with users.Rights holders are not enamored with such distribution schemes, however,as assets are being acquired without transaction history or rightscompensation. The present invention remedies these shortcomings bycreating transaction records and accountability while preserving theease of use of a peer-to-peer transaction structure. Additionally thestructure of tracking transactions allows the incentivization of hostsin the system by compensating them for hosting transfers, a short comingin the present peer-to-peer structures where only a small percentage ofnetwork participants elect to host asset transfers.

[0055] Media agnostic. Since digital media formats are receptive tosteganographic techniques without noticeable quality degradation, assetsmay be distributed in popular media formats. This removes anyrequirements for specialized software or hardware for media playback andallows media to be used in already popular devices and methods andallows portability to playback systems outside the network. Additionallythe present invention may be overlaid on existing ownershipidentification and rights management schemes already present in existingand future media formats.

[0056] Flexible transaction terms. Present and proposed file exchangesystems that provide for compensation terms treat the initialdistribution of an asset as the one for which compensation may beobtained and that compensation is static. The present invention treatseach instantiation of an asset as unique and as such the terms ofacquisition can be flexible with respect to time, parties involved inthe transaction, prior purchasing, intended usage, etc. Further more anyasset can be linked to the specific terms under which it was transferredat any time by referencing the serial number to the transaction record.

[0057] Rights Protection. Since each asset is marked at the time oftransfer, ownership is asserted, royalties due can be calculated, andterms of use can be articulated. These terms can change with eachtransaction or conditions surrounding the transaction as necessary.Since assets can be identified by their mark, other naming schemes canbe used for indexing or other purposes without affecting or obscuringownership, royalties, terms of use, or any other parameter that may beassociated with the asset or the transaction. Assets both in and out ofthe system can be identified through their mark. Furthermore a fulltransaction history can be constructed by linking the most recent markback through the centrally recorded transaction history. This can beuseful for tracking deviant use or distribution of assets.

[0058] From the discussion below it will be apparent that the presentinvention can be used in complementary fashion alongside any of theaforementioned prior art approaches and technologies. Indeed one of theprimary objectives of the present invention is to work with popularexisting media formats and media exchange paradigms. Thus, anotheradvantage of the present scheme is that preexisting installations and/orimplementers can easily overlay the techniques discussed herein tosupplement the functionality of such systems.

BRIEF DESCRIPTION OF THE DRAWINGS

[0059]FIG. 1 is a block diagram illustrating the basic components of adigital asset distribution/tracking system configured in accordance witha preferred embodiment of the present invention.

[0060]FIG. 2 is a flow chart showing the preferred steps involved tointroduce a digital asset into a digital asset distribution/trackingsystem configured in accordance with the preferred embodiment of thepresent invention.

[0061]FIG. 3 is a flow chart showing the preferred steps involved totransfer a digital asset in a digital asset distribution/tracking systemimplementing the preferred embodiment of the present invention.

DETAILED DESCRIPTION OF THE PREFERRED EMBODIMENT

[0062] Overview

[0063] The present invention relates to methods and a system formonitoring the transfer of digital assets within a network. A preferredembodiment embeds a unique serial number in each instantiation of an MP3File at the time of transfer within a peer-to-peer internet based MP3file distribution system. This provides a number of advantages explainedfurther below.

[0064] Historically the concept of an “original” and a “copy” had tealmeaning. Quality typically degraded as assets were copied outside of themanufacture's control. Monetization of originals was the only certainrevenue stream to the asset Rights Holder. Technological advances havesince allowed duplication of originals without quality degradation ordiscernable differences from those released by the manufacturer.Consequently the present inventions use a mechanism for linking assetsto Rights Holders and monetizing every instantiation of that asset. Theconcept of “original” and “copy” are dispensed with. Transactions andasset paths are tracked to provide convenient distribution while at thesame time assuring proper compensation for Rights Holders and authorizeddistributors.

[0065] Recently peer-to-peer distribution systems have proved verypopular, particularly for audio files formatted according to the MP3standard. They require low overhead by the maintainer and increaseaccess speeds and decrease download times because of the number ofchoices of locations from which an asset may be downloaded. The maindrawback has been monetizing the transactions and paying royalties tothe rights holders of the digital assets being traded. This is in largepart because there is no mechanism currently to track the assets as theyate transferred.

[0066] More traditional distribution schemes control the distribution ofassets through centralized control. This requires more capitalinvestment by the provider and does nothing to ensure proper rightsmanagement once the customer has the asset (i.e., later downstreamtransactions to another user). Asset origins cannot be traced once theasset has been distributed to the customer. Furthermore, an entirelycentralized distribution system does not scale well, and cannot exploitthe many benefits of a peer to peer environment. As explained below, apreferred embodiment of the present invention retains the advantages ofa peer-to-peer distribution while marking each distributed asset forlater identification at the time of transfer, linking the asset tospecific usage rights, and providing for royalty compensation to theRights Holder of the asset.

[0067] New peer-to-peer distribution schemes are beginning to emergethat incorporate digital rights management. However these schemes relyon encrypting the assets or the adoption of new proprietary (andbackwards incompatible) asset formats by customers in order to providerights management. A preferred embodiment of the present inventionavoids these pitfalls while retaining the advantage of distributingassets in an immediately useful and popular format by usingsteganographic techniques to mark each asset without impairing itsplayback quality, or its usability across a variety of preexistinghardware and software computing platforms.

[0068] Steganographic techniques have been used in the past in a limitedfashion to watermark assets to identify ownership. Typically this isdone at the time the asset is formatted for the purpose of ownershipenforcement. Steganography has also been used in some applications tohide information within assets. In a preferred embodiment of the presentinvention steganography is used in an entirely unique fashion to trackdigital assets through intelligent marking. These markings mark an assetin such a way as to not degrade its quality, and provide a means oflinking that asset to a transaction record. Furthermore, the mark isembedded in such a way that removing or altering it in a non-detectableway is difficult. This new use of steganography techniques, therefore,allows a rights management system to be employed with existing formatsand transaction methods.

[0069] One key purpose of the present inventions is to allow individualcustomers to trade digital assets with each other while compensatingrights holders for their work. The described system allows each asset tobe identified and tracked (preferably) at the time the asset istransferred. While the described preferred embodiment describes a systemfor trading MP3 files in a peer-to-peer environment many otherconfigurations of assets and networks are possible.

[0070] Structure of the Preferred Embodiment

[0071] A preferred embodiment of a digital asset distribution/trackingsystem 100 constructed in accordance with the present inventions isillustrated in FIG. 1. The system is composed of several componentsincluding a Network 102, through which a number of separate NetworkConnections 104 are provided to a System Network Device 106, a RightsHolder Network Device 108, a Host Server Network Device 110, and aCustomer Network Device 112. It will be understood by those skilled inthe art that other components may be connected to Network 102, and thatnot all connections shown need to be active at all times. There are alsoseveral software components associated with the aforementionednetwork-connected devices, including an Asset Index 114, a TransactionDatabase 116, a Serial Number Assignment module 118, a Serial NumberReconciliation Module 120, a Rights Holder Module 122, and Client Servermodules 124 and 126.

[0072] Network 102 is preferably the Internet, but could be anyimplemented in any variety of commonly used architectures, includingWAN, LAN, etc. Network Connections 104 are conventional dial-up and/ornetwork connections, such as from analog/digital modems, cable modems,etc., between any conventional network device and an Internet ServiceProvider in combination with browser software such as NetscapeNavigator, Microsoft Internet Explorer or AOL. In most applications,Rights Holder Network Device 108 and Customer Network Device 112 will betypically personal computers, while the System Network Device 106 andHost Server Network Device 110 are typically network servers. Of course,other structures and architectures may be more suitable on a case bycase basis for any particular implementation of the present inventions,and so the present inventions are not limited in this respect.

[0073] Software elements of the present invention typically will becustom tailored for a particular application, but preferably willinclude some common features, including the following.

[0074] Operating on System Network Device 106 ate the following softwareroutines and/or supporting structures, which implement a form of digitalasset management. First, an Asset Index 114 contains a list of digitalassets available on the network organized and searchable by Title,Artist and other attributes as determined by customer popularity, systemadministrative requirements, and the like. A Transaction Database 116contains information about each transaction that takes place withinsystem 100 with a serial number primary key linked to such informationas asset, rights holder, time of transfer, length of time of transfer,customer, host of transfer, terms in effect at time of transfer, etc. ASerial Number Assignment Module 118 doles out unique serial numbers inresponse to a transaction request. A Serial Number Reconciliation Module120 receives assigned Serial Numbers from Serial Number AssignmentModule 118 and reconcile them with completed transaction updates fromcustomers. A Serial Number Reconciliation Module 120 periodicallyassesses transfer completion performance based on open and closedtransactions associated with transaction hosts and the time it took fortransactions to complete.

[0075] On the Rights Holder Network Device 108, a Rights Holder Clientmodule 122 communicates with Serial Number Assignment Module 118 andSerial Number Reconciliation Module 120 to allow a rights holder tointroduce an asset in to the system. As used herein, a rights holderrefers to an entity that has at least some ownership interest in someform of content to be disseminated within system 100, and who wishes tobe compensated in some fashion for distribution/use of such content inaccordance with a set of distribution rules (discussed later). In thisregard, Rights Holder Network device 108 may be shared by any number ofindividuals, corporations, etc., who wish to introduce content to system100.

[0076] On Host Server Network Device 110 a Client Server module 124allows two parties involved in a transaction to transfer an assetbetween them over network 102. This device further acts as an initialrepository and later accessible download site, if desired, forintroductions of digital assets.

[0077] System Network Device 106 further includes an Accounting Module126 to reconcile accounts of the Rights Holder, Host, and Customer afterthe completion of each transaction. It is expected, for example, thatsome or all of such entities may share in the compensation charged foreach transaction according to some tailorable formula. This module alsocalculates transaction performance characteristics such as time oftransfer, volume of transfers, and percentage completion for the Hoster,Customer, Rights Holder, and the individual digital asset, whichinformation may be periodically updated in Index 114 and TransactionDatabase 116.

[0078] It will be apparent to those skilled in the art that this is notthe entire set of software modules that can be used, or an exhaustivelist of all operations executed by such modules. It is expected, infact, that other features will be added by system operators inaccordance with customer preferences and/or system performancerequirements.

[0079] Operation of the Preferred Embodiment

[0080] As seen above, a system 100 is essentially a type of commercesystem for peer-to-peer transactions of MP3 format music files. Thereare two major processes involved in its operation, as well as a numberof secondary operational processes discussed further below. The firstprimary process involves introducing assets for sale or trade in to thesystem. This process is outlined in FIG. 2. The second primary processinvolves the actual purchase, trade and tracking of music files withinthe system. This process is outlined in FIG. 3.

[0081] Introducing Digital Assets

[0082] As illustrated in FIG. 2 the first step 210 to introducing adigital asset into an electronic network distribution system is for aRights Holder (or other authorized party) to prepare or acquire an MP3formatted music file (or some other digital content) for introductioninto system 100. Such digital content may arrive from any number ofdifferent sources, and through various delivery mechanisms, includingfixed media, standard wire based connections, wireless connections, etc.Moreover, while the preferred embodiment is beneficially used with anMP3 based file system, the present invention is not limited in thisrespect. Any number of well know types of electronic content can be putinto suitable form for distribution within system 100.

[0083] In step 212 the Rights Holder runs a copy of the Rights Holdersoftware 122 on Rights Holder Network Device 108 to provide a SerialNumber Assignment Module 118 on System Network Device 106 withidentifying information about themselves and indexing information forthe content (file) to be introduced. Typically this information wouldinclude all the information that might be useful for indexing the assetwithin Index 114.

[0084] For Example:

[0085] performer/artist

[0086] producer/agent

[0087] label

[0088] writer/creator

[0089] description

[0090] title

[0091] Terms of use information governing the transactions would also beincluded such as terms and expiration. Administrative information couldalso be included such as an Asset Identifier, a Rights HolderIdentifier, and a copyright registration number or the like. The RightsHolder software would receive back an Asset Identifier, a Serial Number,and an Offset. Other types of information and variations on the abovewill be apparent to those skilled in the art from the present teachings.For instance, it may be useful to provide a pointer or URL with thecontent which specifies a network accessible database providingadditional historical, biographical, and trivia data concerning theasset or its creators.

[0092] Furthermore, it may not be necessary in all cases for a RightsHolder to provide explicit information for each separate assetintroduced. In other words, it is possible that Rights holders canspecify a set of implicit distribution rules in advance, so that somedistribution systems will only require a minimal set of finaldistribution rules before the asset can be introduced.

[0093] In step 214 an Asset Identifier is preferably placed in anobvious location within the MP3 music file itself—most preferably in thecomments section of a tag portion of such file, or in an extended titlefield, or even pre-pended to such file. The Asset Identifier includes anOffset; the Offset specifies where to place a Serial Number in the MP3file being marked, using steganographic techniques. A preferred approachis to use the Offset to specify a valid frame and word count within theMP3 file to begin the marking. The Serial Number is then encoded one bitat a time in the least significant bit of successive data words untilthe entire Serial Number is encoded. The frame CRC, if present, is alsomodified to reflect a new CRC for the frame.

[0094] It should be remembered that these are simply preferredapproaches for the embodiment described herein, and that many othersuitable variations are possible for any particular application. Forinstance, the Offset may not be needed in some cases because it can beset to some default value for a particular rights holder, or evenrandomly generated at the time of transfer. The Offset could also beencrypted, and/or be referenced with respect to some other identifyingpoint within the file, such as an object contained therein. These arebut examples of course, and the present invention is not limited to anyparticular implementation.

[0095] Furthermore, for some types of content, it may be possible toidentify non-critical or blank data areas that are more appropriate forsteganographically embedding the Serial Number. Other variations andmodifications will be apparent to those skilled in the art.

[0096] In a preferred embodiment, the Offset and (at least initial)Serial Number are preferably provided by the System Network Device 108,but could be provided by Rights Holder Network Device 108 in someapplications. Similarly, Asset Identifiers may be automaticallygenerated without requiring specific input from a rights holder. In step216 the marked file, representing a modified version of the original MP3file, is placed on a Host Server 110 within system 100 as the initial(first) instantiation of a digital asset that now can be transferred andeasily tracked. While shown as a separate device, Host Server 110 couldbe the Rights Holder Network device 108 itself, a third party serviceprovider device, any customer device within the system, or anycombination of such devices. Similarly, System Network Device 106 isshown as a separate system, but, again, in some applications could beintegrated in some form as part of Rights Holder Network Device 108and/or Host Server Network Device 110.

[0097] At step 218 Rights Holder module 122 interacts with and providesSerial Number Reconciliation Module 120 at System Network Device 106with the locations on which the digital asset may be found, including atone or more separate network accessible Host Server Network Devices 110.The latter device may be connected to Network 102, and/or may provideother data paths for downloading files across some other transmissionmedium, such as a wireless network.

[0098] In step 220 Serial Number Reconciliation Module 120 then updatesTransaction Database 116 with any information provided to Serial NumberAssignment Module 118 during step 212.

[0099] In step 222 Serial Number Reconciliation Module 120 updates Index114 with appropriate category listings, terms of use, and servers 110 onwhich the digital asset may be found for the digital content (MP3 musicfile) introduced.

[0100] At this point, therefore, the Rights Holder Network Device 108has successfully completed any material steps for introducing a digitalasset for distribution. As created, this digital asset can be downloadedby any number of peer devices 112 and subsequently tracked by a digitalasset management system as transfers take place within system 100.

[0101] While not explicitly shown or described herein, the details ofthe various software routines, executable code, etc., required toeffectuate the functionality discussed above are not material to thepresent invention, and may be implemented in any number of ways known tothose skilled in the art.

[0102] Transfers of Digital Assets to/between Peer Devices

[0103] Much more common, of course, will be customer transactions asdocumented in FIG. 3. Beginning in step 310 a customer uses their copyof Client Server module 124 to browse an Index 114 resident on SystemNetwork Device 106. As alluded to earlier, the Customer Network Device112 can connect to Network 102 in any number of different ways,including through land-based and wireless channels. To obtain access toSystem Network Device 106, a user first sets up an account in anyconventional fashion, including with user identification information,user charge account information, and other similar data.

[0104] After reviewing Index 114, a user than makes a selection of adigital asset to acquire in step 312. This step also preferably includesa review and acknowledgement of at least some portions of the set ofdistribution rules associated with the selected digital asset, includingthe terms of use, before proceeding to further steps. Again, Index 114is shown as being located at System Network Device 106, but it may beconveniently placed at other locations for perusal.

[0105] Based on indexing information for the selected digital asset,several host options may be presented to the customer and may includeany location that is available to transfer the selected asset includingRights Holder Network Device 108, 3rd party hosters (such as Host Server110), System Network Device 106, and/or other customer network devices112. In another variation, to further enhance the usability of system100, the user can also be presented with various additional options fordownload, so that, for example, a first connection to Network 102 mightbe used for browsing/selecting assets, while a separate connection(Internet, wireless, cable based, etc.) is used for downloading theactual assets. This would further allow data traffic to/from customersand download sites to be managed and divided intelligently according tocost, availability of bandwidth availability, etc. For instance a usercould employ a hand held PDA device 112 having access to a narrowbandchannel for selecting a particular item, and then indicate that anactual download of the digital asset to a separate customer networkdevice 112′ be done using a relatively high speed broadband connection.

[0106] In step 314 Client Server module 124 gets the location of hostand asset identifier information from Index 114 which correspond to aselected digital asset (MP3 music file) to be downloaded. Accordingly,at this point, a proposed data path is established for a new transactioninvolving a transfer between two separate computers coupled to network102, of a particular instantiation of a digital asset, including in apeer to peer fashion between two client devices 112. For ease of use,the setup and transfer may be performed by either or both of suchdevices.

[0107] As noted earlier, a first instantiation of the digital asset iscreated based on an original offset and serial number embedded withinthe digital content. To allow for tracking of the particular transfer, anew instantiation of the digital asset is made. In step 316 ClientServer module 124 gets a new serial number and new offset for thistransaction from the Serial Number Assignment Module 118. The new serialnumber and new offset are used to create a unique instantiation of thedigital asset for the particular transaction. Thus, instead of merelycopying the digital content as part of the transfer, the presentinvention creates a separate instantiation to facilitate tracking ofeach transfer (or transaction) within system 100.

[0108] In some applications where security and accounting is not ascritical (or can be remedied by other mechanisms consistent with thepresent teachings) it is possible that actual separate instantiations ofthe digital asset might not be required. Instead, it might be morepractical to simply track the point-to-point movement of a digital assetacross network between one or more Customer Network devices 112, and/orHost Server Network Device 110.

[0109] Serial Number Assignment Module 118 also preferably passes onsuch details as:

[0110] serial number

[0111] customer identifier

[0112] asset identifier

[0113] agreed to terms of use

[0114] host identifier

[0115] to Serial Number Reconciliation Module 120 which will keep theseitems until step 328 or a routine clean up should the transaction nevercomplete.

[0116] In step 318 Client Server module 124 on Customer Network Device112 contacts corresponding Client Server module 124 on Host NetworkDevice 110 to begin the process of transferring the file. As mentionedearlier, it is not necessary that such actual file transfer occur overthe same channel/session, or even the same network 102.

[0117] In step 320 Client Server module 124 at Host Server NetworkDevice 110 sends tracking information to Serial Number ReconciliationModule 120 such as:

[0118] customer identifier

[0119] host identifier

[0120] new serial number

[0121] old serial number

[0122] asset identifier

[0123] The Serial Number Reconciliation Module records this trackinginformation along with a time stamp for further use during step 328.Again, it should be emphasized that these items for the trackinginformation are merely illustrative of the various kinds of usefulinformation that can be maintained, and other examples will be apparentfrom the present teachings. It is expected, in fact, that the precisetypes of information to be maintained will vary significantly fromapplication to application.

[0124] In step 322 Host Server Network Device 110 sends the selecteddigital asset to the customer using any desired standard file transfermethod (including conventional internet file transfer techniques) whichcould include a mechanism for recovery/completion of the transaction ifthe transfer is incomplete.

[0125] At the completion of the transfer, Host Server Network Deviceinitiates step 324 by contacting Serial Number Reconciliation Module 120to report completion of the transfer or its abandonment and the reasonsfor such. This may be as simple as reporting just the new serial numberbut may also include information about the process of the transferitself including number of transfer attempts, interruption informationetc. Serial Number Reconciliation Module 120 the (optionally) adds atime stamp to the tracking information and saves it for step 328.

[0126] At step 326 Customer Client Server module 124 marks the digitalasset file with the new serial number and offset preferably using thesame steganographic technique described above in connection with FIG. 2,and then stores the digital asset in a form suitable for later retrievaland play on the user's system. Accordingly, at the end of the transfer,a second instantiation of the digital asset has been completed andstored for later transfer to yet another customer if desired.

[0127] Customer client server module 124 also contacts Serial NumberReconciliation Module 120 in step 328. It reports the transaction asbeing complete and also indicates whether and where the secondinstantiation of the digital asset can be found for transfer to othercustomers in system 100. Serial Number Reconciliation Module 120 timestamps this transaction.

[0128] In step 330 Serial Number Reconciliation Module 120 wraps up thetransaction. An entry is made in Transaction Database 116 including suchtracking information as:

[0129] new serial number

[0130] old serial number

[0131] customer identifier

[0132] host identifier

[0133] terms agrees to by the customer

[0134] asset identifier

[0135] Of course, other databases may be updated including a customerdatabase (not shown) that may indicate account status and a hostdatabase (not shown) that may indicate quality and volume of thetransactions involving that particular host.

[0136] In step 332 Index 114 is updated to reflect whether the customerindicated that they are becoming a host for this digital asset.

[0137] As a final step 334 accounting tasks are performed by AccountingModule 126. This could include crediting the account of the RightsHolder according to the agreed upon transfer terms, crediting theaccount of the transaction host, and debiting the account of thecustomer that received the transaction. Other conventional accountingoperations can also be performed in accordance with the needs andoptions desired for a particular implementation.

[0138] As with the digital asset introduction software modules, thevarious software routines, executable code, etc., required to effectuatethe functionality discussed above are not material to the presentinvention, and may be implemented in any number of ways known to thoseskilled in the art.

[0139] Other Features & Variations of Present Invention

[0140] Rogue Assets and Asset Monitoring

[0141] In another variation of the present invention, detection of“rogue” assets is performed prior to transfers. By this it is meant thata first customer may attempt to download a digital asset from a secondcustomer, and in the process of doing so, System Network Device 106 maydetect that there is no appropriate tracking record reflecting a priorauthorized transfer to such second customer. Should a rogue asset beuncovered it can be analyzed to determine what asset it is (assetidentifier, name, performer etc). At that point it can be searched forthe embedded serial numbers that will lead to a complete transactionhistory for the asset when it was legitimately transferred. The lastlegitimate transaction can indicate where the asset escaped the system.To prevent further unauthorized transactions, appropriatecountermeasures can be taken; for instance, the second customer's accessprivileges may be suspended or eliminated. At the very least, the sourceof the rogue asset would have to explain how it came in to theirpossession, and such actions are likely to inhibit further unauthorizeddisseminations of digital content. Furthermore, since a completetransaction histories are kept for each digital asset, it is notpossible for users to simply extract proprietary content without beingheld accountable for their actions. In contrast, in existingdistribution schemes, it is essentially impossible to determine theorigin of unauthorized distributions. Furthermore, the present system issufficiently flexible in that it may still allow a “rogue” assettransfer to be completed by simply converting it to an authorizeddigital asset with new tracking information. In this manner, the user'sexperience is not burdened by such monitorings, and in particular, thefirst user is not burdened with the task of determining the legitimacyof assets made available within system 100.

[0142] As a further enhancement to the system, proactive assetmonitoring measures can also be taken. Possible repositories of assetscan be searched and the assets checked for legitimacy following asimilar approach to that outlined in the previous paragraph.

[0143] Distributed Index in Peer to Peer Implementations

[0144] As described above, system 100 has a centralized index 114 atSystem Network Device 106. In another variation, System 100 could alsobe implemented in a more true peer to peer fashion with Client Servermodule 124 including additional software that can catalog the MP3 musicfiles it has local access to, as well as poll “nearby” Client Servers ofother customers' network devices 112 for MP3 file attributes it islooking for, thus creating a form of distributed index 114.

[0145] Accounting Module Variations

[0146] Accounting Module 126 is also a centralized system that providesaccounting functions for system 100. Some implementations could becoupled with a third party accounting system or a peer-to-peeraccounting method. Furthermore, some implementations may not require anaccounting module at all.

[0147] Similarly, in system implementations where centralized managementis not desirable or possible, Client Server module 124 could pass alongadministration information with asset transfers while maintaining alocal transaction database equivalent of centralized transactiondatabase 116. An accounting of transfers and transactions could then bemade on a periodic basis by having an accounting server check the localtransaction databases of client network devices, or having such devicesreport their own records to such servers. This variation, therefore,uses a kind of electronic “meter checking” to monitor usage, downloads,etc.

[0148] Thus, as is evident from the above, a primarily peer-to-peertransaction system can be built that allows exchange of existing formatswhile tracking licensing, royalties, and providing rights management.

[0149] Serial Number Variations

[0150] The preferred embodiment uses Serial Numbers that are assignedcentrally in a random unique way. Serial Numbers could also be generatedeither centrally or local to the transaction and guaranteed uniquenessby aggregating information unique to the transaction; for example: thehost id, customer id, asset id, and time of transaction.

[0151] Asset Introduction Variations

[0152] Although in the preferred embodiment Rights Holders introducetheir assets into system 100, this is not required to exploit thebenefits of the inventions herein. So, system 100 will easilyaccommodate digital assets introduced by parties other than the RightsHolder, as long as there is some additional mechanism for identifyingand attaching appropriate rights to such assets. This can be donethrough any number of conventional programming techniques known to thoseskilled in the art.

[0153] Customer Network Devices

[0154] As noted earlier, a Network device (including Customer NetworkDevice 112, Rights Holder Network Device 108, System Network Device 106and/or Host Server Network Device 110) need not be constantly connectedto network 102 to be a part of system 100. In fact, in many cases,Customer Network Device 112 users do not stay connected at all times totheir ISP. Transaction information and requests could be stored up onsuch devices for transmittal at an appropriate future time with thenecessary resources. Thus, deferred or time-divided transfers are alsoeasily effectuated within the parameters of the present inventions.

[0155] In another variation, a Network Device might work with multipledigital asset management systems 100 on the same or different networks102. In other words, different markets or environments could be used todistribute different types of digital assets based on differentdistribution rules and in accordance with the present teachings.

[0156] In a further variation, a network device may be able to movedigital assets singly or in bulk according to a set of distributionrules between different digital asset distribution/tracking systems. Forexample, musical tastes tend to start in certain geographic areas andthen migrate to others. The top 10 favorite music pieces from onegeographic region for a particular demographic group could thus beautomatically transferred on a regular basis as part of a “stocking”routine at Rights Holder Network Device 108 to ensure popular supportfor the system.

[0157] In some instances, a user of a network device 112 can also electto perform hosting functions. In exchange for supporting such transfers,the user can be given some form of credit/reimbursement/discounts fromthe digital asset management system for all authorized transfers made ofdigital assets. Ratings for various peer based hosts can also bemaintained to increase the popularity and appeal of system 100.

[0158] In another application of the present invention, customer networkdevice 112 may comprise a form of digital jukebox or kiosk located at aphysical facility such as a restaurant, a bar (or similar entertainmentestablishment) or it could even be integrated as part of an airplane(transportation) seat entertainment system. The digital jukebox storesand presents content for selection to prospective customers in anynumber of conventional ways. For example, a conventional monitor,display, etc., can provide album, artist, song information visually to auser. Selection of a particular track can be made using any number ofconventional mechanisms, including touch screens, keypads, buttons, etc.A conventional debiting system (coin or credit based) is used forcollecting payment from the user. After verifying payment and selection,the digital jukebox preferably creates yet another instantiation of thedigital asset chosen by the user, and such information is again trackedby system network device 106. In this fashion, a versatile, easilymodified digital jukebox with access to a wide variety of content can beimplemented in a variety of facilities. This application may bedesirable where it is desired to minimize investment in fixed media(such as CDs, Records, tapes, etc.) which rapidly become obsolete due tochanging tastes, and which require a fixed capital investment on thepart of the proprietor.

[0159] Furthermore, client server 124 of the digital jukebox itself mayinclude a centralized computer that is accessed by a number ofdistributed access nodes (not shown) at any particular facility. Forinstance in a casino, healthclub, or similar establishment a variety offixed stations can be presented with trackable content (i.e., visuallyon a screen or audibly through a speaker, headphone or earphone) to aparticular user to enhance his/her experience in a particular forum.This approach is also advantageous in mass transportation systems, suchas airplanes, trains or cruise ships, and can be integrated within apersonalized passenger seat entertainment system. Furthermore, from theperspective of digital rights holders, this approach may be attractivebecause the possibility of unauthorized accesses is greatly reduced insuch controlled facilities.

[0160] To further augment the capabilities and attractiveness of thisapproach, a mechanism for providing music samples can be included aswell, to increase likelihood and ease of use for the customer. Forexample, a small speaker, headphone or earphone is used as an outputdevice, and in a fashion so as to not interfere or be disturbed by amain audio output provided by the digital jukebox. While such types ofsampling are provided by some online sites (such as Amazon for example)the applicants are unaware of any such functionality provided at aphysical facility in a digital jukebox.

[0161] In yet a further variation, the customer network device 112 canbe implemented in the form of a digital vending machine, or a similararchitecture suitable for hot-docking a phone, an MP3 player, or thelike. For example, a number of conventional hand held devices nowutilize memory stick technologies from a variety of vendors. Byincluding some programming functionality in a digital vending machine, auser can select, store and/or play content on a portable personaldigital appliance by modifying a modular memory device used by suchappliance. Similarly, many hand held devices (including MP3 players)include standardized bus interfaces, including USB types, Firewire, etc.By including such bus on a digital vending machine, programming contenton such hand held devices also becomes possible.

[0162] Digital Assets

[0163] Although the described preferred system 100 is optimized fortransacting MP3 music files, as used herein, the term “digital asset” isintended in its broadest sense to encompass any number of differenttypes of content, items (or electronic proxies for physical items) thatcan be distributed electronically. For instance, the present inventionscould also be applied to other audio formats, video, pictures,interactive games, virtual experiences, programs, instruction sets,e-mail, webpages, advertisements, text (newspapers, books, op-ed pieces,articles and similar human readable media), etc. In other environments,digital assets could also be a form of electronic proxy and thusrepresent tangible goods such as merchandise to be delivered,merchandise redemption tickets, periodical products, etc. Similarly,Rights of use products can also be represented as digital assets such asevent entry, time-share slots, pay per view, club membership, carrental, accommodation, travel, restaurant reservations, etc.Subscription products can also be represented as digital assets such asproduct of the month, magazine subscriptions, vacation clubs etc.Service products can also be represented such as car washes, haircuts,auto service, shipping, telephone service, house cleaning, etc.Financial products can also be represented as digital assets such asinsurance, financial asset certificate, mortgages, loans, futures,income streams, digital cash, credit, dividends, etc. Commitments canalso be represented as digital assets such as mortgages, loans, rent,short sales, subscriptions, etc. A variety of asset types could bemanaged by the same system simultaneously. Different products could alsobe combined in to a single digital asset.

[0164] Accordingly, the present inventions are expected to enable a widevariety of unique, useful and popular electronic market/distributioncommunities because the principles are easily extended to a wide varietyof tradable items.

[0165] Steganographic Variations

[0166] While the preferred embodiment discussed above uses asteganographic technique for embedding a serial number in an MP3 file,there are many other approaches that could accomplish this samefunction. Furthermore, it is expected that the particular mechanism usedto provide and associated serial numbers will be different fromapplication to application, because various digital asset formats arereceptive to different approaches.

[0167] In addition, as alluded to earlier, digital asset serial numberscould be prepended or postpended; alternatively, unused portions of thedigital asset could be used to store the serial numbers. Finally, amodified format for a digital asset could be created to accommodate theserial number, such as new variation of an MP3 file, MPEG file, etc. Forexample, one or more standards groups or industry groups may utilize aform of digital asset that includes fields intended to accommodate aserial number.

[0168] Tracking Variations

[0169] The preferred embodiment embeds successive serial numbers in themedia file in different unique locales for each instantiation of thedigital asset, in a kind of passport-stamping approach This makes itharder to remove traces of the transaction history and easier toidentify the transaction history, including all transfers occurring overthe network, should the need arise. However in some cases the particularmedia for a digital asset may be better suited to storing only one or alimited number of serial numbers. In such cases the entire transactionhistory can be reconstructed by recovering a single serial number sinceeach transaction references the serial number of the previous transfer,and database 116 maintains a record of each transfer.

[0170] The preferred embodiment describes the process of asset exchangeby referring to the serial number as being linked in a one to onerelationship with a transaction, and having a value based in somefashion on the characteristics of the transaction. Nonetheless, inanother variation, it could just as easily be structured around the oneto one relationship of the serial number and every instantiation of anyasset, so that the serial number has a value based in some fashion onthe characteristic of the digital asset.

[0171] Network Variations

[0172] System 100 described in the preferred embodiment makes use of anetwork 102 (preferably the internet) as well as a variety of networkdevices such as personal computers, and servers. System 100 could justas easily been described on any network 102 to which network devices andstorage devices are attached. Possible devices include PDA's, cellphones, smart appliances to name a few. Possible networks includeprivate network systems and future public network systems using cable,telephone, optical, wireless, fiber, and other pipe and broadcasttechnologies.

[0173] It can be seen quite clearly that the present inventions providean additional measure of flexibility in managing digital assets within aparticular distribution environment. It is no longer impossible toachieve the dual aims of both security for the rights holder, and easeof use for the end user. By permitting digital assets to be easilytransacted in an open environment, and without cumbersome proprietaryformats, the usability and attractiveness of a digital assetdistribution network is considerably enhanced. The present inventionachieves such goals by making the process easy for the various relatedentities and by operating in the background or in a transparent fashionthat does not impede the utility and security of the overall system. Incontrast to prior art systems which simply allow wholesale copying ofdigital assets without accountability, the present invention alsoaddresses the needs and concerns of digital rights holders to ensuretheir participation and ultimate success of the system.

[0174] Although the present invention has been described in terms of apreferred embodiment, it will be apparent to those skilled in the artthat many alterations and modifications may be made to such embodimentswithout departing from the teachings of the present invention. Othertypes of components beyond those illustrated in the foregoing detaileddescription can be used suitably with the present invention. Similarly,descriptions of many common components usable with the inventions andknown to skilled artisans have been omitted so as to not obfuscate thepresent teachings. Accordingly, it is intended that the all suchalterations, modifications and additions be included within the scopeand spirit of the invention as defined by the following claims.

[0175] Finally, it should be noted that the Title and Abstract of thepresent disclosure have been provided solely to satisfy certain U.S.governmental administrative requirements, including the indexingrequirements of 37 C.F.R. 1.72, and for no other purpose. As such, suchportions of the present disclosure should not be relied upon forinterpreting and/or limiting the scope of the present claims.

What is claimed is:
 1. A system for distributing digital assets across anetwork, including between a first network device and a second networkdevice, the system comprising: (a) first rights-holder server coupled tothe network, said first right-holder server being adapted to introduce adigital asset for distribution, said digital asset having an associatedfirst set of distribution rules; and (b) a second host server coupled tothe network, said second host server being adapted to store anddistribute said digital asset; and (c) a third management server coupledto the network, said third management server being adapted to tracktransfers of said digital asset over the network and to generatetracking records associated with said transfers; wherein said transfersover the network involving said digital asset between the first networkdevice, the second network device and/or the second host server areprocessed in accordance with said first set of distribution rules. 2.The system of claim 1, wherein the first network device can obtain saiddigital asset from the second network device and/or said second hostserver, and without requiring further authorization from said firstrights-holder server.
 3. The system of claim 1, wherein a modificationis made to said digital asset for each transfer, said modification beingused by said third management server for generating said trackingrecords.
 4. The system of claim 3, wherein said modification does notalter user-perceptible content of said digital asset.
 5. The system ofclaim 3, wherein said modification alters and/or adds an identificationlabel for said digital asset so that each transfer of said digital assetis associated with a unique identification label.
 6. The system of claim1, wherein said second host server is implemented by at least one of thefirst network device or the second network device, so that transfers ofsaid digital asset are performed in a peer-to-peer manner across thenetwork.
 7. The system of claim 1, wherein said digital asset includesaudio, video, picture and/or text based data.
 8. The system of claim 1,wherein a second set of distribution rules can be introduced by saidfirst rights-holder server to affect transfers of said digital assetover the network.
 9. The system of claim 1, wherein the network includesthe Internet.
 10. The system of claim 1, wherein said first set ofdistribution rules includes indexing information, terms of use, and alocation of said second host server.
 11. The system of claim 1, whereinsaid digital asset is also encrypted and/or contains steganographicallyprocessed data so as to reduce unauthorized transfers over said network.12. The system of claim 1, wherein a new instantiation of said digitalasset is created for each transfer occurring over the network betweenpeer devices.
 13. The system of claim 1, wherein said first networkdevice is integrated within a fixed personal entertainment system,including a gambling machine, a digital jukebox, and/or a passengerseat.
 14. A system for introducing digital assets into an electronicnetwork distribution system, comprising: (a) a first computer coupled tothe electronic network distribution system; and (b) a first softwareroutine executing on said first computer, said first software routinebeing configured to perform at least the following operations: i)receiving and storing a digital asset on said first computer; and ii)processing administration information for said digital asset, includingan asset identifier and a rights-holder identifier, and associating thesame with said digital asset; and iii) interacting with a digital assetmanagement system to generate a modified version of said digital asset,said modified version of said digital asset being based on saidadministration information and tracking history information provided bysaid digital asset management system; iv) posting said modified versionof said digital asset to a location suitable for download by said peerdevices from the electronic network distribution system; wherein saidmodified version of said digital asset is configured so that a trackinghistory can be maintained by said digital asset management system ofeach transfer of separate instantiations of said digital asset betweenpeer devices coupled to the electronic network distribution.
 15. Thesystem of claim 14, wherein said administration information alsoincludes terms of use and expiration data for said digital asset. 16.The system of claim 14, wherein said digital asset includes audio,video, picture and/or text based data.
 17. The system of claim 14,wherein said first computer is a server coupled to the internet.
 18. Thesystem of claim 14, wherein said digital asset management system and/orsaid peer devices embed tracking information within said modifiedversion of said digital asset during each instantiation of said digitalasset.
 19. The system of claim 18, wherein said tracking informationincludes a unique identifier for each transfer of said modified versionof said digital asset within the electronic network.
 20. The system ofclaim 14, wherein said first software routine is further configured toprovide second administration information for a digital asset such thatlater instantiations of said digital asset within the electronic networkdistribution system are based on said second administration information.21. The system of claim 14, wherein said first software routine isfurther configured to receive accounting information from said digitalasset management system, including: (a) information concerning thenumber of instantiations of said digital asset created by transferswithin the electronic network distribution system; (b) revenue derivedfrom and/or to be credited for said transfers.
 22. A system forexchanging digital assets over a network, comprising: (a) a firstcomputer coupled to the network, said first computer storing a digitalasset which includes both digital content and a first unique identifierassociated with a first instantiation of said digital asset; and (b) asecond computer coupled to the network; and (c) a first software routineexecuting on said first computer and/or said second computer, said firstsoftware routine being adapted to coordinate transfer of said digitalasset to said second computer; wherein a second instantiation of saiddigital asset is created for said transfer to said second computer, saidsecond instantiation including a second unique identifier.
 23. Thesystem of claim 22, wherein said first computer and said second computeroperate to transfer said digital asset in a peer to peer manner acrossthe Internet.
 24. The system of claim 22, wherein after said transfer, asecond transfer of said digital asset can occur from either said firstcomputer and/or said second computer, said second transfer further usinga third instantiation of said digital asset and a third uniqueidentifier.
 25. The system of claim 22, wherein at least said secondcomputer is a portable electronics device, including a personalcomputer, a personal digital assistant, and/or a telephone.
 26. Thesystem of claim 22, wherein said digital content includes an MP3 basedaudio file.
 27. The system of claim 22, wherein said second uniqueidentifier is based on combining information from any one or more of thefollowing: a first id for said first computer, a second id for saidsecond computer, an asset id for said digital asset, a customer id, arandomly generated number and/or a time of said transfer.
 28. The systemof claim 22, wherein a catalog of available digital assets is maintainedat said first computer.
 29. The system of claim 22, wherein said firstsoftware routine is also configured to execute an authorization routine,said authorization routine being adapted to secure agreement from a userof said second computer to access terms associated with said digitalasset.
 30. The system of claim 29, wherein said first routine is alsoconfigured to execute a setup routine, said setup routine being adaptedto set up a transaction account with a digital asset management systemseparate from said first computer and said second computer, saidtransaction account including an identifier for a user of said secondcomputer, identifiers for any transfers performed by said user, andbilling information associated with said transfers.
 31. The system ofclaim 29, wherein said first computer coordinates said transfer to saidsecond computer in cooperation with a digital asset management system,such that said digital asset management system provides said secondunique identifier.
 32. The system of claim 31, wherein said firstcomputer provides authorization for said digital asset management systemto track all transfers of digital assets from said first computer. 33.The system of claim 32, wherein said first computer also performshosting functions, and further receives credits from said digital assetmanagement system for all authorized transfers made of digital assets.34. The system of claim 29, wherein said second computer polls othercomputers coupled to the network to determine an optimal transfer sourcefor said digital asset.
 35. The system of claim 29, wherein said digitalcontent includes content for a newspaper, a book, a magazine, and/or aperiodical.
 36. The system of claim 29, wherein said secondinstantiation of said digital asset is created in accordance withdistribution rules in place at the time of said transfer, whichdistribution rules can be different from distribution rules in place atthe time of creation of said first instantiation of said digital asset.37. The system of claim 29, wherein said second computer is integratedwithin a fixed personal entertainment system, including a gamblingmachine, a digital jukebox, and/or a passenger seat.
 38. A system formanaging transfers of digital assets over a network, comprising: (a) amanagement computer coupled to the network; and (b) a first softwareroutine executing on said management computer, said first softwareroutine being adapted to prepare a digital asset for transfer over thenetwork in accordance with a set of distribution rules; wherein amodified version of said digital asset is generated by said firstsoftware routine, said modified version including a uniqueidentification number associated with a first instantiation of saidmodified version of said digital asset; and (c) a second softwareroutine executing on said management computer, said second softwareroutine being adapted to track transfers of said digital asset over thenetwork; and wherein a separate instantiation of said digital asset iscreated for each transfer occurring over the network.
 39. The system ofclaim 38, wherein said set of distribution rules are provided by arights-holder management system, and include restrictions on terms ofuse and time periods of use.
 40. The system of claim 39, wherein saidset of distribution rules include information on title, author, andidentification numbers for said digital asset.
 41. The system of claim38, wherein said unique identification number is embedded into saidfirst instantiation of said modified version of said digital asset usinga steganographic process.
 42. The system of claim 38, wherein saidtransfers of said digital asset take place in a peer-to-peer manner overthe network in coordination with said management computer and such thata complete tracking history for said digital asset is maintained by thesystem.
 43. The system of claim 42, wherein said second software routineinterfaces with a first client system and a second client systemconnected to the network in a peer to peer relationship, and providesunique identification numbers for each transfer occurring over thenetwork between said first client system and said second client system.44. The system of claim 38, wherein said first software routine furtheridentifies network accessible locations available for transfers of saiddigital asset.
 45. The system of claim 38, further including anaccounting routine for performing accounting functions in connectionwith said transfers, including crediting of rights holders accounts,crediting of transaction host accounts, and/or debiting of useraccounts.
 46. The system of claim 38, further including a monitoringroutine for performing authentication operations on digital assetsstored and/or transferred between client systems over the network, saidauthentication operations including a determination of an embeddedserial number of a digital asset and an identification of a lastauthorized transfer of said digital asset.
 47. The system of claim 46,wherein adjustments to a user account, including access privileges, aremade in accordance with the determinations made by said monitoringroutine.
 48. The system of claim 38, wherein a subsequent uniqueidentification number used for a second instantiation of said digitalasset is derived in part from said unique identification number.
 49. Thesystem of claim 48, wherein a tracking history for said digital asset,including all transfers over the network, can be derived from saidsubsequent unique identification number.
 50. The system of claim 38,wherein at least some portions of said modified version of said digitalasset are encrypted and/or contain steganographically processed data.51. The system of claim 38, wherein distributions of said digital assetover said network are not preconditioned on securing authorization forindividual copies of said digital asset.
 52. The system of claim 38,wherein electronic indexes and catalogs are provided by the managementcomputer for facilitating locating and transferring of said digitalasset.
 53. A method of distributing digital assets in a peer-to-peerconnectable environment across a network, including between a first peernetwork device and a second peer network device, the method comprisingthe steps of: (a) introducing a digital asset into the peer-to-peerconnectable environment, said digital asset having an associated firstset of distribution rules; and (b) storing and distributing said digitalasset at a first network accessible location so that a transfer of saiddigital asset can be made by the first peer network device and/or thesecond peer network device; and (c) generating a tracking recordassociated with said transfer; and (d) repeating at least step (c) forany subsequent transfers of said digital asset within the network;wherein said transfer as well as any of said subsequent transfers overthe network involving said digital asset between the first peer networkdevice, the second peer network device and/or the first networkaccessible location are processed in accordance with said first set ofdistribution rules and are associated with tracking records.
 54. Amethod of introducing digital assets into an electronic networkdistribution system, comprising the steps of: (a) receiving and storinga digital asset on a first computer coupled to the electronic networkdistribution system; and (b) processing administration information forsaid digital asset, including an asset identifier and a rights-holderidentifier; (c) associating said administration information with saiddigital asset; and (d) interacting with a digital asset managementsystem to generate a modified version of said digital asset, saidmodified version of said digital asset being based on saidadministration information and tracking history information provided bysaid digital asset management system; (e) posting said modified versionof said digital asset to a location suitable for download by clientdevices from the electronic network distribution system; wherein saidmodified version of said digital asset is configured so that a trackinghistory can be maintained by said digital asset management system ofeach transfer of separate instantiations of said digital asset betweenpeer devices coupled to the electronic network distribution.
 55. Amethod of exchanging digital assets over a network, comprising the stepsof: (a) storing a digital asset on a first computer coupled to thenetwork, which digital asset includes both digital content and a firstunique identifier associated with a first instantiation of said digitalasset; and (b) coupling said first computer to a second computer overthe network; and (c) creating a second instantiation of said digitalasset, including a second unique identifier; (d) storing said secondinstantation of said digital asset at said second computer.
 56. A methodof managing transfers of digital assets over a network, comprising thesteps of: (a) coupling a digital asset management computer to thenetwork; and (b) providing a digital asset to said digital assetmanagement computer; and (c) providing a set of distribution rules forsaid digital asset; and (d) preparing a modified version of said digitalasset for transfer over the network in accordance with said set ofdistribution rules, said modified version including a uniqueidentification number associated with a first instantiation of saidmodified version of said digital asset; and (e) tracking transfers ofsaid digital asset over the network; wherein a separate instantiation ofsaid digital asset is created for each transfer occurring over thenetwork.
 57. A method of providing a digital asset for distributioncomprising the steps of: (a) preparing a digital asset for distributionover an electronic network, said digital asset including digital contentthat is associated with a digital rights holder; (b) providing a serialnumber for said digital asset, said serial number being uniquelyidentified with a first introduction of digital asset for distributionwithin said electronic network; and (c) embedding said serial numberwithin said digital asset so as to generate a first instantiation ofsaid digital asset suitable for distribution over said electronicnetwork; and (d) placing said first instantiation of said digital assetin one or more locations accessible by users of said electronic network;and (e) providing a list of said one or more locations so that saidusers of said electronic network can locate said first instantion ofsaid digital asset; (f) updating a transaction database associated withsaid digital asset to reflect an occurrence of said first instantiationof said digital asset; (g) updating a digital asset index database withadministrative information associated with said digital asset, includinga list of said one or more locations, terms of use of said digital assetand category information for said digital asset; wherein users of saidelectronic network can monitor said digital asset index database beforeelecting to access said first instantiation and/or later instantiationsof said digital asset.
 58. A method of distributing a digital assetwithin an electronic network comprising the steps of: (a) providing anindex of digital assets available for distribution over the electronicnetwork, each digital asset having a first serial number associated witha first transfer within the network, and including digital content thatis associated with a digital rights holder; wherein said index includesa list of one or more locations for said digital assets, terms of use ofsaid digital assets and category information for said digital assets;and (b) providing a second serial number for said digital asset inresponse to a request for a second transfer of a digital asset, saidsecond serial number being embedded within said digital asset; and (c)transferring said digital asset from a host server to a client device inresponse to a confirmation of acceptance of said terms of use for saiddigital asset; and (d) updating a transaction database associated withsaid digital asset to reflect said second transfer of said digitalasset.